A recent study conducted by Bybit, a cryptocurrency exchange, reveals that meme coins are gaining significant popularity among investors. The report, titled “Beyond the Hype: The Realities of Institutional Memecoin Investments,” analyzes data from January 1 to May 1, indicating a growing trend of meme coins becoming an important part of crypto portfolios.
According to Bybit, institutional investors showed a keen interest in meme coins, particularly during the peak of the trend in March. The study shows a substantial increase in institutional memecoin allocations, with spot holdings rising by 226% to reach $204 million in March. This allocation further increased in April, reaching a total of $293.7 million.
However, as market sentiment turned negative, institutional investors swiftly sold off half of their memecoins. By the end of the period, their allocation decreased to $139 million, which is still 125% higher than the beginning of the year. This indicates that institutional investors are expecting a return of extreme risk-taking in the future.
On the other hand, retail investors witnessed a drastic surge in memecoin holdings during the peak of the memecoin mania in early April. Their allocations increased by 478% from February to April, reaching a total of $567 million. However, they later sold off their memecoins, reducing their holdings to $371 million.
The report also highlights the preference of both retail and institutional investors for dogecoin (DOGE). Institutions allocate 36.17% of their meme coin holdings to DOGE, while retail investors allocate 24.58%. Additionally, both groups show a preference for Ethereum-based meme coins, with retail investors holding 20.95% in PEPE and 14.61% in SHIB, compared to institutions’ 22.23% in PEPE and 10.39% in SHIB.
The study further emphasizes the differing investment strategies between retail and institutional investors. Retail investors allocate a larger portion (4%) of their portfolios to meme coins compared to institutions (2.5%). However, both groups primarily invest in established meme coins with a longer track record. The report specifically mentions the popularity of DOGE, which has become a long-term investment choice for both cohorts. BONK has also gained attention from institutions, with a 10% allocation compared to other memecoins.
What are your thoughts on the report’s findings? Share your opinions in the comments section below.
